cars and insurance issues - nclc

© Copyright, National Consumer Law Center, Inc., All rights reserved.

Cars and Insurance Issues

Doug Heller, Consumer Watchdog

John W. Van Alst, The National Consumer Law Center

Jessica Hiemenz

National Consumer Law Center

This webinar is sponsored with a grant from the Annie E. Casey Foundation and is one of a series of webinars about working cars for

working families.

September 22, 2011


Presenter – John Van Alst

• Joined NCLC in 2006 as a Staff Attorney at the Center’s Washington, DC Office.

• At NCLC John specializes in issues related to car sales and finance.

• Prior to joining NCLC John work for seven years

as an Attorney with Legal Aid of North Carolina.


Presenter – Douglas Heller

• Consumer Watchdog’s Executive Director Douglas Heller is one of the nation’s leading experts on, and critics of, the insurance industry. Heller is also recognized as a vocal critic of political corruption and corporate influence in government.

• He has led legislative, regulatory and public education campaigns related to insurance and energy issues, healthcare reform, whistleblower protections and political accountability and is a frequent media commentator on these issues.

• Heller has authored numerous reports on issues such as energy deregulation, medical malpractice and insurance industry low-balling.

• He has served on several consumer- and social justice-oriented boards and has testified before Congress and several state legislatures.

• In 2010, Heller led the coalition that defeated the anti-consumer Proposition 17, sponsored by Mercury Insurance, despite being outspent by more than 12 to one.

• Heller also led the 2001 lobbying effort that blocked the proposed bailout of California’s electric utilities in the wake of the state’s deregulation debacle.

• Through both advocacy work and community outreach, Heller has been California’s consumer leader in the effort to implement and expand the nation’s first low-cost auto insurance program for low-income motorists and managed a successful effort to change California insurance regulations to limit the impact of drivers' ZIP code on their insurance rates


Agenda

• Doug Heller- Cost and availability of car

insurance, especially for low-income families.

• Questions

• John Van Alst- Other car insurance issues including credit insurance and insurance related products and the practices of insurance

companies when dealing with claims and damaged cars..

• Questions


Contact Information

• John W. Van Alst- National Consumer Law

Center

– [email protected]

• Douglas Heller - Consumer Watchdog



For more information

• To subscribe to the listserv of those interested in Cars and Working Families just go to:

http://lists.nclc.org/subscribe/ and check the Auto

Ownership, Finance, and Policy list

• Visit the following website:– National Consumer Law Center’s Auto Page:

• http://www.workingcarsforworkingfamilies.org

– Consumer Watchdog

• http://www.consumerwatchdog.org


Cars and InsuranceCars and Insurance

Douglas Heller- Consumer Watchdog

John W. Van Alst- National Consumer Law Center

National Consumer Law Center®

September 22, 2011

Working Cars for Working Families


Other Insurance Issues

• Insurance Companies and Claims for Damage

to Cars

• Dealer Sales of Insurance and Insurance Related Products


Total Loss

• Actual Cash Value (ACV) based upon age, mileage, condition, etc.

vs.

• Cost of repair

• plus resale value for totaled vehicle

• plus associated costs (rental)

• plus diminution in value (perhaps)


Total Loss Consumer Approaches

• Inquiry into ACV- may require your own

appraiser

• Policy terms if dealing with your own

insurance company

• State Law and Regulation


Insurance Companies and Diminished Value

• Repair not equal to car prior to damage

• Even if a damaged car is repaired perfectly, it is still worth less than a car that has not been damaged and repaired

– Perception of prospective purchasers

– Cost of assessing adequacy of repair


Diminished Value- Consumer Rights

– State Law and Regulation

– Who’s insurance company is responsible

– Policy terms if dealing with your own insurance company


Insurance Companies and Diminished Value

• Policy Implications

– Insurance Companies reluctance to disclose claims

data

– Auto Databases

– NMVTIS

• http://www.vehiclehistory.gov/

• Insurance companies must provide NMVTIS with information on total loss vehicles for past five model years and encouraged to report all


Databases Webinar


Insurance and Insurance-like Products Sold by Dealers

• Credit Life Insurance

• Credit Disability Insurance

• Mechanical Breakdown Insurance

• Guaranteed Asset Protection

• Service Contracts

• Vehicle Anti-theft/ Window Etch

• Vendor's Single Interest (VSI) Insurance


Add-ons


Contact Information

• John W. Van Alst- National Consumer Law

Center


• Douglas Heller- Consumer Watchdog



For more information

• To subscribe to the listserv of those interested in Cars and

Working Families just go to: http://lists.nclc.org/subscribe/

and check the Auto Ownership, Finance, and Policy list

• Visit the following websites:

– National Consumer Law Center’s Auto Page:

• http://www.consumerlaw.org/issues/auto/index.shtml

– Consumer Watchdog:

• http://www.consumerwatchdog.org/

– National Motor Vehicle Title Information System:• http://www.nmvtis.gov


Cars and Insurance

Questions

www.ConsumerWatchdog.org

Buying Auto Insurance in St. Louis

A Tale of Two Drivers

Meet Warren:• Single man in his mid-30s

• Licensed since he was 16

• Perfect driving record – no tickets or

accidents

• 2005 Ford Taurus

• 20 mile daily round trip commute

• Buys a basic limits policy plus Comp and

Collision with $500 Deductibles

• REMEMBER: THESE FACTORS ARE THE

SAME FOR EVERY QUOTE

Richmond Heights (63117) Executive

$558

No Masters Degree, High School Only

$629

… is now unemployed

$713

…and moved four miles to 63112

$762

…and needs to pay on an installment basis

$822

CATCH - 22

…but didn’t have a car in the past

$1,553

…or had been uninsured

209% more than the first quote.

$1,722

Mercury Insurance Quote in Nevada

73% more without prior insurance

California Proposition 103

(1988) • No rate shall be approved or remain in effect which is excessive,

inadequate, unfairly discriminatory or otherwise in violation of this

chapter.

• Auto insurance premiums shall be based on the following factors in

descending order of importance:

1. driving safety record

2. annual miles driven

3. years driving experience

4. other factors approved by the insurance commissioner

• The absence of prior insurance coverage, in and of itself, shall not be a

criterion for determining rates, premium or eligibility.

www.ConsumerWatchdog.org

cars and insurance issues - nclc

Documents